National Assembly summons NNPC boss over $1.5bn loan

A showdown is imminent between the National Assembly and the Nigerian National Petroleum Corporation (NNPC) over a directive to the indigenous oil company to stop moves to obtain a $1.5 billion loan. NNPC Group Managing Director, Mr Andrew Yakubu, Group Executive Director (Finance) and other top management staff have been summoned to appear before the National Assembly Committees on Petroleum Resources (Downstream and Upstream).

Last month, the NNPC announced its intention to obtain the loan to offset debts owed some international partners on its crude oil deal. The oil company hinged its decision on a section of its Act, which does not compel it to get approval from the National Assembly. Should NNPC get the loan, it would contravene section 162 (1) of the 1999 Constitution, said the National Assembly. Besides, the federal legislature is insisting that the corporation must supply all crude oil details to it before any further action could be taken on the loan. The loan, said NNPC, is to offset foreign debts owed by the organization.

It insisted that the $1.5billion loan was purely a “commercial decision” taken by the corporation to pay off accumulated debts for petrol already supplied by foreign importers and to save Nigeria’s credit rating in the international markets. Reuters which broke the news on the loan deal, said it was struck towards the end of last year. The loan, provided by several Nigerian and international banks, was brokered by Standard Chartered Bank. The NNPC pledged 15, 000 barrels of crude per day as collateral with an agreement to pay the loan in five and a half years. The NNPC is believed to owe foreign commodity traders over $4 billion for petroleum products supplied over the years.

The National Assembly has, however, insisted that the NNPC stay action on the loan until it provides adequate details on how the debts were incurred, payment arrangements and its effect on the economy. Chairman of the National Assembly Committees on Petroleum Resources (Downstream), Senator Magnus Ngei Abe, disclosed this at the weekend. Speaking in Abuja, Abe said the directive to NNPC stopping the loan is based on section 162 of the 1999 Constitution.

He said: “Our position in the National Assembly is that they should not go ahead with any loan. NNPC is trying to take another loan of 1.5 billion dollars to pay for existing debts and we have told them in clear terms that the transaction should not proceed without approval from the National Assembly. NNPC should come and explain to us how the debts were incurred, if you say they were incurred from products, what percentage of the products was realized, what percentage was sold, when you sold the product, what percentage did you pay, please, explain this business to Nigerians.

“ I don’t mind what kind of business entity that NNPC thinks they are, the debts of NNPC are invariably the debts of Nigeria, so, nobody has the right to commit the country to that indebtedness without the approval of parliament. “All the relevant committees in the National Assembly met and took a position that we need to be properly briefed on that loan before it can proceed. Two weeks ago, they were to come to explain and put this thing in proper perspective, unfortunately, a lot of us were not here, so, we could not make that appointment. “We still expect to see them but in the meantime, we have actually agreed that we should do a formal letter directing the NNPC not to proceed with that loan without the approval of the National Assembly.

That is where we stand.” Reminded that the NNPC had variously relied on its law which does not compel it to seek clearance and approval from the National Assembly, Senator Abe replied: “This issue between the NNPC and the National Assembly; we have debated it publicly and privately, the Constitution is clear as to what the NNPC is; so to think that anybody can create a corporation that can drain or siphon the resources of the country without parliamentary oversight or approval is an illusion and I dare NNPC to go ahead and commit this country to that $1.5 billion loan without the approval of parliament. Let’s see them do it. “It is not possible and we will not allow it. So, that argument that they don’t need approval from the National Assembly has been overtaken by the Constitution of Nigeria.

At the last hearing we had with the NNPC, I read the relevant sections of the Constitution and it is very clear; that any company or corporation with shares is subject to this Constitution. “So, any law that NNPC interprets and arrogated to itself such powers, clearly, is contrary to the Constitution of the Federal Republic of Nigeria and the National Assembly will not allow it; if it means going to court, we will go to court. While we are here, it will not happen!

“If they are going to commit this country to a debt of $1.5 billion by whatever means, they need to come and explain to us, as elected representatives of the Nigerian people how the debts were incurred, how they are going to be paid, and how the loan will not affect us. We must understand that before they can proceed. If we don’t understand it, they cannot proceed. When people are doing something that is open and transparent, why should you be afraid of the National Assembly?

Why don’t you want to come and explain what you are doing? “I am part of anything that makes Nigeria a better, organized society that makes Nigeria a more accountable society. Nobody will say that what happens to oil can be a private business of anybody in this country. The economic life of Nigeria depends on what happens in NNPC so, I don’t know how the NNPC can think that Nigeria will allow them on their own to decide to do whatever they want to do and nobody can ask questions, it will not happen! What happens in NNPC to that magnitude is the business of all Nigerians.

According to Abe, “I have read the legal opinion of the NNPC and I have responded to it. The Constitution of Nigeria is clear and unambiguous on this issue; I already have a letter from the NNPC, saying they are coming. “When it comes to the contention between institutions, sometimes, maybe it is good to challenge one another and you discover the limits of the other’s power. So, if NNPC wants to challenge us in the National Assembly, they are welcome to try but our position is clear; don’t go ahead without coming to explain to us exactly how this will benefit the Nigerian people and how this helps us as a country…”Abe said.

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